The Case for 4% Growth

Demand for new homes -- and the outlook for economic growth -- are understated, say these economists. How to play the new boom.

Snow paralyzed the Eastern U.S. last week, but it won't put a chill on what could be the hottest economy since the late 1990s. That's the contrarian outlook of Applied Global Macro Research, an unusually rigorous and prescient group that expects 4% growth in economic output this year and next. The firm's three economists -- Jason Benderly of Vail, Colo., and Carsten Valgreen and Niels-Henrik Bjørn of Copenhagen -- cite the ongoing housing recovery for their bullish outlook, arguing that future demand for housing is understated....